Jeffrey Franks specified that the accession forecast for the following year will be

held around 1,5%, but this is not good news for Romanians because ever since
the agreement was signed, if there is something the leader of the IMF
commission came to the fore with, this is the optimism of the forecasts. In 2009
the economy was expected to decline by 4%, but it collapsed by more than 7%.
The forecast for 2010, foreseeing a 1,9% decline, will also be disclaimed. What is
worrying for the government men is the fact that during a pre-elective year, in
2011, they will have to reduce the budgetary deficit from the 7% likely to be seen
at the end of 2010 to 4,4%. And in 2010, when highly austere laws were adopted,
such as the reduction of wages by 25%, all that was achieved was a stabilization
of the deficit at 7%. In 2011, the unique remuneration law and that of the retired
pays should work wonders they should reduce the deficit by 3%!
This is the reason for which the main concern of the IMF commission leader is
represented by the possibility that the government will have to, starting the 1 st of
January, to bring the wages of those working for the state to the level before the
25% reduction as a conclusion of a decision taken by the Constitutional Court,
which declared the regulatory document as constitutional, while highlighting the
temporary nature of its stipulations. It is important for this country to have the
ability of handling its budget so therefore, if there are any legal impediments
preventing this, they will obviously create a difficult situation and we will, of
course, have to find another way of handling the budget if such situations appear.
Yes, we are worried, answers Franks to a question of the press.
Grievances to the president
The second concern of Romanias last-resort creditor, the IMF, is the possibility
that its debtor would cut its income by reducing the Added Value Tax on basic
foods to 5% and by not taxing retirement pays lower than 2000 RON. The longterm effects of such measures are no concern to the IMF, keeping in mind that
starting with 2012 it will have to get its money back, and quick. So it therefore
took all the precautions so as these two stipulations not be applied, on the part of
president Bsescu as well, who seems to have promised the IMF spokesmen that
he would not promulgate those laws.
Ultimatum on the Urgent Government Enactment 50
The last issue Franks came to Bucharest to deal with is the long-debated
Enactment 50. We must have a satisfactory Enactment, otherwise we will not be
able to carry on. This is not only about us, but also about the European
Commission. () Yes, it is a condition, was the assertive answer of the leader of
the IMF commission when asked whether Enactment 50/2010 is a condition for
the deliverance of the following tranche. In his opinion, the application of
Enactment 50 concerning loans for the population, in its actual state, and the
contracts in course would cause losses of hundreds of millions to the banks.
The reaction of their clients would be interesting, who, dissatisfied, asked for the
cessation of the agreement with the IMF. Unfortunately, they would be the first
ones who would have to suffer from such measure. The main virtue of the
agreement with the IMF is precisely the fact that the currency could be kept at a
tolerable level (by the National Bank of Romania), while undergoing a contraction
of income. An undervalued RON as an outcome of the cessation of the agreement
with the IMF would make instalments unbearable, with or without Enactment 50.